I REFER to the letter “Bank's collection agency as bad as Ah Long,” (The Star, May 17) in which the writer says, “The banks have certainly lost their sense of professionalism.”
I agree and although such complaints only appear occasionally in the press, there are reasons to believe that many people are in the same unfortunate situation and their number is increasing daily.
These people are harassed relentlessly and mercilessly while they are unable to defend themselves, either because they don't know how or they think the bank is right.
Yet, the bank is not right. Two essential laws of economics and business state that money is the reward for work done, and a business deal must be equitable to be successful.
Banks were originally set up so that customers could deposit their money with them.
A deposit is automatically a saving because the customer would not put the money in the bank if he needed it.
If the bank is true to its function, it should guard the customer's money and also increase its amount.
This way, the customer's confidence in the bank will grow and he will continue to deposit money with it.
In order to increase the customer's money, the bank must set to work and ensure the deposit grows in a manner that is lawful and beneficial to the customer, the bank and society at large.
These days, banks prefer to make money by charging late payment fees and a host of other punitive fees which are non-earned income and therefore can be termed as usury.
Besides destroying customer's confidence, usury seriously undermines the economy because usury does not recognise the value of work and only concentrates on getting the pieces of paper and coins that constitute money.
The banks have also forgotten how to make an equitable business deal.
Equitable means that both parties in the transaction stand to gain or lose in the same proportion.
Bank deals, however, are inevitably slanted in favour of the bank. Maybe the banks think that giving out money also gives them the upper hand.
But the fact is that money in itself has no value, rather it is work that brings value to money.
Usury disregards the value of work, and people who have no work or are not adequately paid for the work they do, simply cannot repay their loans.
A bank that lends money and does nothing to ensure economic conditions are favourable to both employment and trades, will eventually end up getting money only from the National Mint.
The banks must urgently revise their way of doing business and foster a culture of saving, where saving does not mean refraining from buying, but rather buying what you need with the money one has saved from what he earned from his work, and not borrowed.
The Government, on its part, must considerably reduce their humongous benefits and subsidy schemes that render people dependent, debt ridden, sick and poor.
No government or business can defy the law of the market which states that money is the reward for work done.